Improving Channel Effectiveness

Situation:

A large, established company was experiencing declining customer satisfaction among its VAR installations. At the same time, top tier VARs were becoming dissatisfied with the vendor due to margin erosion. The issue was clearly aligned to the company’s enterprise products being over-distributed, that is too many VARs selling its products. This resulted in declining margins for all VARs, and a lower investment in training and product expertise.

This client needed a new structure that would reward value-based VARs selling its enterprise products, and eliminate web and telemarketing VARs. They wanted to eliminate two-thirds of its current VARs, including those that generated significant revenue through its commercial products.

Action:

We worked with this company to create a cross-functional international team that would address and evaluate its current channel structure. Through the process we developed a scalable, multi-tiered channel structure that supported a value-based tiered structure while preserving geographic differences. A full roll-out program, supported by sales, new contracts, distribution, marketing was created. Early on we identified VARs at risk that generated significant revenue on the commercial side who would adversely react to being eliminated from the enterprise side. These companies received early one-on-one attention with company executives to focus on the positive investments in the other side of the business

Results:

The new program was well received, which resulted in new, invigorated commitments from key channel partners. There was no negative impact on commercial revenue, but rather the company increased its market presence with new programs and higher sales.